tv [untitled] February 2, 2011 2:00am-2:30am PST
final out today. we can make additions to it throughout the year. our cycle for publishing would be to do a wholesale revisiting every year after we published a comprehensive report, so that is all the most recent statistics. to the degree we have a mid-year revision or enhancement, we are not opposed to doing that mid- year. >> it is also designed to be more online than printed, which allows it to be updated for printing very small quantities. >> that is helpful. i was trying to figure out what my comments were directed toward as at its work featured in the future. when we first talked about this some time ago, part of what was on my mind was that one of these days we will have to ask for a rate increase again. at that time, i would expect that we would have -- basically, we have to stand and deliver and
say that giving as a five-year rate structure was a wise thing to do, that the money that was given to us as part of that as well as wsip is well spent, giving credibility to the rate increase, and at that at the end of that five-year interval we would have barely digestible documents that would support -- fairly the adjustable documents that would support what we did. that gives us the opportunity to answer the obvious questions and to toot our horn and give information about things people might not think to ask about. within this particular document, i think there are a couple of obvious questions that we missed. let me give you two. one is the wsip program did not really have a section devoted to it. obviously, it was reflected in
the financials. there were some things the or ancillary to it. there was nothing that said, "here is how we are doing on the wsip program." second, there was an expenditure chart in there. over the past five years, there has been a 40% increase in our expenses, and there is no comment that says it is a reasonable thing. there may be others. those were two obvious ones that came up. we should try to address those. i will not suggest whether you do that on the current report, but by the next time we issue this we should have those conversations. >> i will definitely take that point. on the second point, we will highlight the additional debt service costs. 80% of what we are doing on our rates are increases to pay the debt from the capital program and increase cash flow. we will make sure to incorporate
both of those. >> the graph i was thinking of was the stacked bar charts. what pages that? page 15, the stacked bar chart. it shows personnel depreciation, interest, contractual, and materials. that seems a pretty hefty increase over that five-year interval. >> ok. >> just to go along on commissioner moran's comment, i received correspondence forward to me -- forwarded to me recently from a constituent in san francisco who was concerned that rates for water have doubled in the past five years. that is obvious to us as well. i think an explanation of that is important as we prepare for the future in respect to a number of the issues we have raised here today, and also the cost for recycled water.
we can educate the ratepayers as well. i will get into more detail with you in a specific letter citing those issues. >> thank you very much. >> i would be happy to do that. also, we can huge page 11 to highlight how our -- we can use page 11 to highlight the bill and how much cheaper we are for the community with water and sewer service. we will be happy to respond on that. >> there are two different versions here. page 11 and 12 are different versions. >> if i was on the stc, i would certainly be able to see the cost. that is a good comparison. thank you. >> basically, a chart shows a portion of this report on the wholesale rate that is attributed to the increase. there is not anything like that
for the and city rate, which is the kind of thing we've talked about it could be helpful. another thing that springs from this is a good section on the sustainability plan. is that coming back to us any time soon? i am looking at the advanced calendar. >> i will double check one is coming back. but yes, we have been trying to merge with the strategic plan we did last summer. i am reviewing a draft of it friday. i do not know when it is rolling out, but i will look. >> we should probably make sure that is on an advanced calendar. i am sorry. i think he said this. how many of these get printed and distributed? >> we are doing very small print jobs as needed. the goal is to do as much as we can electronically, on the website. all the sfpuc employees are
seeing it in their on-line newspaper. this morning, we met with jpmorgan, who has been buying over and a billion dollars of our bonds just to walk them through what we think will be the third of our award winning publications to communicate the financial and operational successes of sfpuc. it is really going to depend upon different venues. >> perhaps some of these comments could be integrated into the online version as soon as possible. >> i would be happy to do it. >> thank you. any other comments on the annual report? >> the third item is the water bond update. we've been selling a lot of bonds since december. we sure did. we had another very successful sale, also led by deputy cfo charles bird in the front row.
we had another very successful sale in december. what this means with those $530 million we sold in december -- we have sold $2.70 billion of the $4.60 billion water system improvement bonds. the bidding environment looks very helpful to the san francisco public utility commission and the water department in particular. if i could just have the camera zoomed in on this a little bit, we achieve savings of what equals about $62 million compared to what our financial plan had assumed. we are doing financial plan projections assuming we are able to borrow money at 5%, and instead we were able to borrow money at 4.8% and 4.5%. in addition, we have gone out and borrowed 40-year debt with a fixed rate. the good news for our ratepayers' is we have locked in
those rates and they will be able to benefit from low rates for the next 40 years on this debt. it was a competitive sale. we closed right before the holiday -- the christmas holiday season, closing december 22. the tax exempt structures went out 20 years. that was about $10 million of savings. we were very eager to go to market because we wanted to capture one more sale benefiting from the american recovery and reinvestment act build america bonds. that program allowed the federal government to pay 35% of the interest cost for the rate payers and provide a subsidy. that meant that our rate payers locked in on that build america bond portion -- that was equivalent to $52 million of savings over the next 40 years. we successfully had a program
run by mr. perle and his staff. the bidders love our bonds because they not only secret information like we have shared with you before, they see our quarterly budget statements. they also see our website that mr. harrington walked through. those materials show the up to date -- up-to-date water and power generation. investors like to see that level of transparency, including these two bids. but the tax exemptions, you have five bidders. citigroup was the winning bid. whenever selling bonds competitively, the bidder has to buy everything or nothing. it goes to the lower bidder and the best deal for the rate payer. jpmorgan we also visited with earlier this morning. they have been very aggressive in bidding.
they bought over $1 billion of our bonds over the next -- over the last 18 months. this was the most savings for the repairs, coming in at 4.5% annual true interest rate. the calendar for the water bond -- i mentioned we have sold $2.70 billion to date. what this means just on wsip, the water system improvement project -- we have locked in place six great costs that are paying -- that are saving the ratepayer $3.60 million. if we add on to that the refunding we have done on water, waste water, and the waste water bonds were sold last summer, we have locked in place a total of $450 million of savings lower than what we had projected. here is our right modeling long term. that is really helping us cover a lot of the shortfall in
revenues where we had at lower water sales and lower sewer treatment. you look at that thursday in the budget. we have $1.90 billion more to sell from wsip. we will next need money in the summer, about $600 million in june or july. because the build america bonds program has expired and the president and congress are not looking to renew it, that means we will go back to the tax- exempt market. that is a much smaller pool of investors who buy those bonds. we are looking at every opportunity we can to get our name out there, tell our story, the great savings we report to you on our contracting out. we regularly share that with potential investors who see quarterly reports. they do look at our point -- our 245-page document, our
annual report. that is one of our key target markets. this is another success story. we look forward to a answering any questions you might have. >> congratulations, mr. rydstrom, once again. commissioners, any questions? bravo. >> and thanks to charles, too. >> thank you, charles. we really appreciate it. any public comment on the general managers' report? hearing none, at next item please. >> the next item would be the "supply and conservation agency general manager report. i believe mr. james is here. >> good evening, members of the commission. i am c.e.o. and general manager of the agency that represents 26 of your wholesale customers outside of san francisco. i would like to meet with you and check with you.
president -- commissioner torres, i have not forgotten my promise to meet with you. i hope the rest of you stay put so we can schedule meetings. i will keep my remarks brief. you had a discussion in december at your last meeting. you had a number of items on your calendar. i want to make comments about some of those. you had a presentation by mr. rydstrom on financial issues and rate setting. part of that had to do with water savings and how that affects rates. part of it has to do with how to explain rate increases to customers. i wanted to offer my suggestions because we are some of your customers, and the explanations from you would be useful as well. first of all, on the matter of conservation, excellent graphics here today show you what is happening with water use. i believe all those represented county feeders, for example the
consumption by san francisco. that was how much water flowed across county lines into san francisco. i am a date to junky like commissioner -- a data junky like commmissioner moran. i would love to see more data. but there's a lot lost in that. the data are complex and confusing as well. we have one agency in palo alto that is a multiple-utility agency. they have waste water, garbage, gas, fiber-optic. they cover all the utilities in palo alto. there were trying to make use of their data across different utilities to see if they could sort out the water conservation from the weather and the economic downturn. they had a lot of data. they are data junkies t 00. they could not make a lot of sense of it yet. the signals are not clear. most of us would like to take
credit for the downturn in water usage being conservation. it is not so. palo alto had some good slides at the conference yesterday that showed the water conservation they can identify, but it does not explain the drop in water use. my concern is that most of that is economic downturn. hopefully, there will be lessons learned during that downturn and some of the savings will remain in place, but that is not certain. for water managers, it creates quite a dilemma. you do not know if you can count on the savings. that is problematic. the other problems it creates has to do with rates. we have rates based upon the amount sold. we have just begun some discussions with your manager about how to mitigate that. it is a problem for you. it is a problem for us. the problem for you is that he does not know who -- know how much revenue he is going to generate. we pay two-thirds of it. you do not know what your income
is. most of us are salaried employees. you are on the commission. you know what you're going to make each year as an individual. you do not know as a utility. we have the same problem. we do not know how much we are going to make as individual utilities, and we do not know what our cost to san francisco is going to be. as todd displayed last time, when you under collect revenues one year, you have to add it to the bill for next year and end up chasing your tail. i think there are ways to get around that to provide a steady flow of revenue to you, to provide predictable costs to our agencies, and to still have water use reflect what purchases so there is an incentive to conserve so that people can do cost effectiveness analyses. we will pursue that with your staff. i hope something good will come
out of it. i do not know that this is done anywhere else. this would be another groundbreaking event for san francisco. finally, on the matter of what customers that for the value, you had some discussion of the last time. as i recall, it's sort of focused on getting reliability out of wsip. it does not do a lot for water supply. it is mostly reliability so we do not have 60 days without water. that is a good point. but there are other beneficiaries of the work that you do and we do. if you look at not just the value added but the true benefits, everybody benefits from greater reliability of the system by that i mean -- reliability of the system. by that i mean residents, people with jobs. everybody benefits, current and future. you look at water conservation.
who benefits from that? a lot of our communities are investing in water conservation so they can accommodate future growth. it is not the existing customers necessarily who benefit. it is future customers. some agencies are now building that interconnection fees so that future customers payback existing customers for water conservation. it is a smart thing to do. there is another beneficiary that was not mentioned. that is a tremendous amount of cost that goes to this beneficiary. they do not vote. it is the environment. i think when we talk to our public, we should talk articulately about the residents benefit, people with jobs benefit, existing customers benefit, and future customers benefit, and the environment is benefiting. a lot of my work has been toward that. we have to tell the public that is part of what they are investing in. if you can produce that
material for the work you were doing on our behalf, we would be glad to use that and provide it to our 26 agencies so they can provide it to their customers as well. >> thank you, mr. jensen. that was very helpful. commissioners, any comments on mr. jensen's report? hearing none, next item, please. >> the next item is the consent calendar. all matters listed under consent calendar are considered routine by the san francisco public utilities commission and will be acted on by a single vote. approval an amendment to the power enterprise project fund agreement on a renewable and advance energy services with aepc group, increasing the amendment with a time extension of one year to continue to support renewable and advanced
energy generation technologies and related project. b, approved terms and conditions and authorize the general manager to execute a new five-year lease for existing telecommunications with t mobile west corporation for $48,600 annually for installation of mobile/wireless antennas and radio equipment. c, approve the terms and conditions and authorize the general manager to execute a new five-year lease for an existing telecommunications site with t mobile for wireless and mobile antennas related to radio communications signals. d, approve the terms and
conditions and authorize the general manager to execute a new five-year lease at the crystal springs cottage site for the installation of radio equipment used for the transmission and reception of radio communication signals on watershed land. e, approve the plans to install a 60-inch steel water main on 28th avenue. f, approve the plans and specifications to award the contract for north shore and mariposa pump station to the lowest responsibility --
responsive bitter -- bidder. does any commissioner wish to separate any item from this? president vietor: any items to remove from the consent calendar? is there any comment from the consent calendar? all those in favor? opposed? the motion carries. next item. >> the next item begins the regular calendar. i contend, discussion and possible action to approve a community benefits policy that will provide the framework to develop an agency-wide comprehensive community benefits program. >> hello, commissioners. juliet ellis. i think this is my first presentation for you on this site. i am the general manager for external affairs. i want to welcome commissioner
martin. i am glad you're here. i contend should be familiar to most of you. -- item 10 should be familiar to most of you. this came before you at your commission meeting on november 23 in draft form. as background for commissioner courtney, in late 2009, the commission directed the staff at the public utilities commission to develop a community benefits program, a comprehensive program and policy. shortly after that meeting in 2009, two consultants who had been working with us for the past year began assessing where the public utilities commission is with respect to community benefits programs, helping us develop a definition we used in the development of the policy before you today. at the meeting on november 23, we also provided the wall with an executive summary of the
draft report -- provided you all with an executive summary of the draft report we had been working on around community benefits. that report will be finalized and released in february. since the meeting in november, we incorporated a lot of the comments that we received at that meeting, and specific comments around incorporating language in the policy with regards to implementation of the environmental justice policy. that has been included. there are a couple of other comments that were presented at that meeting that have been incorporated. our next step upon approval of the policy will be to take that and hit the ground running in developing a comprehensive community benefits program and staffing up with that. that will be used as we think about how to put some meat on the bones around the policy with regard to implementation. in the last couple of days, there have been questions
raised with regards to the policy. it has been noticed and people have seen it again. one question we wanted to respond to was a question around how we will operationalize the triple bottom-line approach referred to in the policy. this also speaks really well to the comments that were provided about how we think about measuring and communicating what the impact is and the taurus is we are making between economic benefit -- and the choices we are making between economic benefit and community benefit and environmental benefit. the question is how you create a framework so commissioners can make choices. it will be around making choices with regard to how we way economic benefit, environmental benefit, and equity benefit. how do we find the sweet spot in the middle where we are getting all three of those goals?
internally, we are talking about implementation. that is where we are. the question about how to operationalize the triple bottom-line approach -- it is important. it is front and center. as we develop the program, we are monitoring, evaluating, and prioritizing to create tools and tables to be able to list the concepts set forth in the policy. the other area that has been discussed and highlighted as critical is, for example, the implementation of the environmental justice program approved in 2009. the community benefits program would give us a vehicle to be able to think about implementation. many organizations talk about environmental justice. the question within the puc staff is what that actually means for day-to-day work. for the commission, the question that comes back to me is when are you going to start
implementing it. what does it mean for the decisions we make, the programs we do, and the activities we support? those would be quick responses to one question and has been around how we think about implementation. the other question that came in this week was the role that community-based organizations are going to have as we think about community benefits. in the resolutions, we refer to stakeholders and stakeholder engagement. we do not specifically call out community-based organizations. that has caused some concern with community-based partners. in response to that, i just want to take the opportunity to say as we think about stakeholders' we include community-based organizations as stakeholders. we did not specifically call out community-based organizations because we also understand there are individuals, residents, and ratepayers attached to
organizations, whether they are community organizations or nonprofits. we are talking about the broad family of stakeholders who have skin in the game and are going to be impacted. we want to find all the different ways we can reach out to those constituents. folks who are watching in the audience today -- that includes community-based organizations. whether they are churches or local partners on the ground, we are going to incorporate their feedback in this resolution and identify ways of beginning to work with them immediately. with that, i will stop. you have seen this many times before. i will respond to questions if you have them. president vietor: i have one question on this implementation. will we be hearing in our budget proceedings about what is going to cost, and the staffing needs to implement it? >> yes. i think the external affairs apartment -- external affairs
department is up on the 27. we have been having intensive conversations with the general manager as well as assistant general managers. the great thing about the community benefits program is that it is comprehensive and hits different enterprises. the idea is, for example, as assistant general manager hale is thinking about issues around power and funds coming into the agency that will need to support disadvantaged communities, she will be working with external affairs and the community benefits team to have thus provide leadership about how to do that programming. as we think about the sewer system improvement program, there will be a community benefits approach and strategy. it is not just about new benefits. it is about how to engage the public as we think about what the impact is going to be, and how we think about